For the second time in two years, the auto insurance industry is asking Californians to approve a measure that would allow insurance providers to offer continuous coverage discounts when drivers switch companies.

Proposition 33 is a follow-up to Prop. 17, which California voters rejected in a June 2010 election by a 52 to 48 percent margin. Proponents say Prop. 33, by comparison, improves upon its predecessor with expanded consumer protections while allowing drivers an opportunity for lower rates in a more competitive marketplace.

"You can't shop for your discount for any other insurance carrier in the state, and we don't think that's fair," said Yes on 33 spokeswoman Rachel Hooper.

The idea seems simple on the surface, but there's actually considerable room for argument over Prop. 33, which is the latest development in more than two decades of wrangling over auto insurance laws.

Proponents say Prop. 33 would make California's auto insurance companies more competitive, but opponents at Consumer Watchdog say the measure is actually a vehicle for rate hikes disguised as a discount.

In Consumer Watchdog's view, Prop. 33 is a means to undo a voter-approved prohibition against insurers discriminating against drivers who lack auto insurance in the five years prior to their purchase of a new policy. Consumer Watchdog founder Harvey Rosenfeld pushed for that rule in Prop. 103, which passed in 1988.

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Now, Consumer Watchdog says Prop. 33 would allow companies to raise fees on drivers who cancel policies for economic reasons or simply don't need to have a car for a period of time.

Consumer Watchdog is not the only organization to report Prop. 33 could lead to higher insurance rates for some Californians.

The state's nonpartisan Legislative Analyst says insurers would generally charge higher premiums to customers who would not be eligible for a continuous coverage discount.

Under current law, California insurance providers can use three key factors to set rates: a driver's safety record, annual miles driven and the number of years a customer has been a driver.

There are 16 other factors insurance companies can use to set rates or discounts, including whether drivers choose to maintain coverage with their current provider.

In response to Consumer Watchdog's worries about surcharges, Hooper says drivers can already face those penalties since they could lose loyalty discounts if they lack insurance for a single day.

Prop. 33, she says, offers new protections by allowing drivers to claim continuous coverage even if they lack insurance, for any reason, for 90 days. Drivers could also claim continuous coverage after losing insurance for as long as 18 months due to layoff or furlough or for any length of time due to military service.

Children who live with a parent could receive a discount based on their parent's coverage.

Prop. 33's contributors include George Joseph, the founder of Mercury Insurance. Joseph has given more than $8.2 million to the campaign, and the Los Angeles-based Mercury led support for Prop. 17 in 2010.

Proposition 33

YES means: Insurance companies could offer new customers a discount on automobile insurance premiums based on the number of years in the previous five years that the customer was insured.

NO means: Insurers could continue to provide discounts to their long-term automobile insurance customers but would continue to be prohibited from providing a discount to new customers switching from other insurers.